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Can your Swiss bank close your account without telling you why?

Helena Bachmann
Helena Bachmann - [email protected]
Can your Swiss bank close your account without telling you why?
Take your money and run — to another bank. Photo: Pixabay

It defies all logic that any company would tell its clients to take their business elsewhere. But that is exactly what’s happening in Switzerland.


Swiss media has reported a curious, though incomprehensible, phenomenon: a number of banks have been summarily (and apparently arbitrarily) ‘firing’ some clients without giving them any explanation for this action.

This is reportedly happening to ‘regular’ people who have not run afoul of the law, rather than someone suspected of embezzlement, tax fraud, or any other fraudulent or illegal activities.

As one person told Watson news platform, he received a letter from his bank telling him to close his accounts and transfer the money to another financial institution within a month.

“In a dry letter, the bank warned me that after this deadline, it would no longer deal with me or accept any deposits in my name,” he said.

Another person talked about "being punished for no reason, deprived of something I had had for years, even though I had always paid off my credit card bill in full, every month.”

Right to terminate

None of the letters, regardless of the bank that had sent them, offer any explanation for their actions.

When contacted by Swiss media with requests for a reason behind this practice, the banks in question simply invoked their “contractual right” to “terminate” their relationships with existing clients without having to justify this move.

The banking Ombudsman, whose  job it is to investigate clients’ complaints, confirmed that  both the termination and the lack of explanation are totally legal.

In fact, this right to ‘dismissal’ is not one-sided, but mutual.

In other words, just as clients are not tied to a particular financial institution indefinitely, and can close their accounts at will without having to give a reason, so can the banks.

When looked at from this perspective, the banks’ actions don’t appear to be unfair, just odd.

After all, businesses try their best to retain clients, not send them away to competitors.


Yes, but why?

It is human nature to want to understand the reason behind such unfair and, some may say, discriminatory practices.

Since the banks are mum on the subject, we can only speculate that these decisions could be driven by a number of factors, ranging from a low balance in the account, which makes managing it unprofitable, to the fact that the client is a US citizen and therefore ‘unwelcome’ in the banking world.

READ ALSO: Why are Americans being turned away from Swiss banks?

Or, it could be simply a logistical reason of some kind.

But whatever their motivation, by refusing to disclose their reasons for closing accounts, the banks are, in essence, protecting themselves from potential backlash.


What should you do if your account is closed?

As banks are acting in accordance with the contract you signed when you opened the account (though you probably haven’t paid attention to this particular cause), the answer is — nothing.

All you can do is move your assets to another bank, though, depending on the number and type of accounts you have (investments, pension plans), it could be a hassle.


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Tim McCabe 2024/01/16 18:08
Another example of how the world's systems favor those who have a great deal of money. The ability of individuals to operate within the financial system should be a guaranteed right. Banks should accept a social contract to accommodate those at all levels of wealth - so that all may survive and thrive.

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